Barrett Business Services, Inc. Announces Third Quarter Earnings
PORTLAND, Ore., Nov. 1 /PRNewswire/ -- Barrett Business Services, Inc.
(Nasdaq: BBSI) reported today net income of $500,000 for the third quarter
ended September 30, 2000, a decrease of $1,335,000 or 72.8% from the third
quarter of 1999. Basic and diluted earnings per share for the 2000 third
quarter were $.07, as compared to basic and diluted earnings per share of
$.24 for the 1999 third quarter. The operating results reported for the third
quarter ended September 30, 2000 were consistent with the Company's
expectations reported on October 23, 2000.
The decrease in net income compared to the same period a year ago was
attributable primarily to a decline in the Company's revenues, combined with
higher workers' compensation expense and depreciation and amortization, offset
in part by lower selling, general and administrative expenses. Revenues for
the third quarter ended September 30, 2000 totaled $80.7 million, a decrease
of approximately $15.2 million or 15.8% from the $95.9 million for the same
quarter in 1999.
The Company's revenues continue to be adversely affected by the reduced
availability of qualified employees in a low unemployment economy, as well as
the Company's decision to terminate its relationship with certain customers
due to unacceptable profit margins or risks associated with credit or
workplace safety. In an effort to improve future operating results,
management is continuing to increase the Company's rates for services to
reflect the current imbalance between the demand for and supply of qualified
employees for its customers. In addition, selling, general and administrative
expenses for the 2000 third quarter were reduced by 14% compared to the same
quarter a year ago.
The Company attributed the increase in workers' compensation expense in
the 2000 third quarter over the same quarter a year ago to an increase in the
expected total costs of claims. Higher comparable depreciation and
amortization expense was due to costs associated with the Company's new
information system, which was implemented in the first quarter of 2000.
(in thousands, except (Unaudited) (Unaudited)per share amounts) Third Quarter Ended Nine Months Ended
September 30, September 30,
Results of Operations 2000 1999 2000 1999
Revenues:
Staffing services $49,881 $56,434 $149,346 $139,848
Professional employer services 30,863 39,441 105,022 111,749
Total revenues 80,744 95,875 254,368 251,597
Cost of revenues:
Direct payroll costs 62,865 74,285 198,024 195,025
Payroll taxes and benefits 6,564 7,620 21,788 21,013
Workers' compensation and
safety incentives 3,401 3,022 9,261 8,157
Total cost of revenues 72,830 84,927 229,073 224,195
Gross margin 7,914 10,948 25,295 27,402
Selling, general and
administrative expenses 6,128 7,116 19,077 19,376
Depreciation and amortization 820 532 2,373 1,339
Income from operations 966 3,300 3,845 6,687
Other (expense) income, net (122) (138) (405) (80)
Income before taxes 844 3,162 3,440 6,607
Provision for income taxes 344 1,327 1,402 2,817
Net income $500 $1,835 $2,038 $3,790
Basic earnings per share $.07 $.24 $.28 $.50
Weighted average basic shares
outstanding 7,236 7,581 7,371 7,609
Diluted earnings per share $.07 $.24 $.27 $.50
Weighted average diluted shares
outstanding 7,276 7,634 7,415 7,655
Certain 1999 amounts have been reclassified to conform with the 2000
presentation. Such reclassifications had no impact on gross margin, net
income or stockholders' equity.
The following summarizes the unaudited balance sheets at September 30,
2000 and December 31, 1999.
($ in thousands) September 30, December 31,2000 1999
Assets
Current assets:
Cash and cash equivalents $351 $550
Trade accounts receivable, net 25,967 30,216
Prepaid expenses and other 863 1,219
Deferred tax assets 2,875 1,658
Total current assets 30,056 33,643
Intangibles, net 20,434 21,945
Property, equipment and software, net 7,332 7,027
Restricted marketable securities and workers'
compensation deposits 4,400 6,281
Unrestricted marketable securities 1,559 --
Deferred tax assets 818 712
Other assets 1,392 1,132
$65,991 $70,740
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable $-- $865
Current portion of long-term debt 2,748 2,783
Line of credit payable 2,915 4,882
Income taxes payable 268 --
Accounts payable 1,073 1,356
Accrued payroll, payroll taxes and
related benefits 10,166 11,437
Workers' compensation claim and safety
incentive liabilities 4,718 4,219
Other accrued liabilities 1,099 413
Total current liabilities 22,987 25,955
Long-term debt, net of current portion 2,408 4,232
Customer deposits 658 815
Long-term workers' compensation liabilities 687 699
Other long-term liabilities 1,949 1,710
Stockholders' equity 37,302 37,329
$65,991 $70,740
Barrett Business Services, Inc. is a human resource management company
with offices in ten states. For 1999, Barrett reported net income of
$5.1 million and revenues of $347.9 million.
Statements in this release about future events or performance are
forward-looking statements, which involve known and unknown risks,
uncertainties and other factors that may cause the actual results of the
Company to be materially different from any future results expressed or
implied by such forward-looking statements. Factors that could affect future
results include economic conditions in the Company's service areas, the effect
of changes in the Company's mix of services on gross margin, and future
workers' compensation claims experience, among others. Although
forward-looking statements help to provide complete information about the
Company, readers should keep in mind that forward-looking statements may be
less reliable than historical information.
SOURCE Barrett Business Services, Inc.
Web site: http: //www.barrettbusiness.com
Company News On-Call: http: //www.prnewswire.com/comp/082187.html or fax, 800-758-5804, ext. 082187
CONTACT: William W. Sherertz, President and Chief Executive Officer, of Barrett Business Services, Inc., 503-220-0988
Released November 1, 2000